The Fourth Appellate District granted a petition for writ of mandate. The court held that the staying of an action due to the defendant’s bankruptcy had no impact on the plaintiff’s ability to proceed against a non-debtor codefendant.
Francisca Cabandong filed suit against Ronald Powell, Powell Financial Services, Inc., and Does 1 through 100 in May 2012. In 2014, Powell filed for bankruptcy and the action was stayed. The bankruptcy court lifted the stay in July 2016. In August 2016, Cabandong amended her complaint to name Shawn Higgins as Doe 2. Cabandong served Higgins with the amended complaint the same month.
Higgins moved to dismiss the complaint based on Cabandong’s failure to serve him within three years of the commencement of the action, as required under Code Civ. Proc. §583.210(a). The trial court denied the motion, finding the action had been stayed during the pendency of Powell’s bankruptcy proceeding, and the three-year period had thus not yet expired. Higgins filed a petition for writ of mandate challenging that ruling.
The court of appeal granted Higgins’ writ petition, holding that the bankruptcy stay did not bar Cabandong from proceeding against Higgins. As a matter of law, the automatic stay that applied to claims against debtor Powell did not apply to Cabandong’s claims against non-debtor Higgins. Accordingly, the trial court erred in ruling that Powell’s bankruptcy stay affected Cabandong’s obligation or ability to serve Higgins in this action. Because Cabandong served Higgins more than three years after commencement of her action, §583.250 required that the complaint against Higgins be dismissed.